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Micro businesses: Payday Loans to the Rescue

With the slowing down of the economy because of the economic crisis of 2008, the banking system has experienced serious downsizing. Banks have shown great reluctance in providing loans to small (including the very small or micro) businesses. As a a result a small business or a micro business in desperate need for capital finds it almost impossible to get the same from a major bank.


Payday loans to the rescue :
A survey in the United Kingdom found that only 10% of the applications for loans from micro businesses to banks were accepted. Getting loans from banks and financial institutions has become an increasingly tough task for most small and micro businesses. With traditional banking avenues closed to them, small businesses and micro businesses are increasingly turning to payday loans as their best hope for capital. It was found that in the year 2013 alone, over a quarter of micro businesses turned to payday loans to meet their capital expenditure plans and further develop their businesses.

What are small and micro businesses ?

Small businesses are businesses with 10 to 20 employees while micro businesses are those with less than 10 employees. Typically a micro business could be a small mechanic shop, a dry cleaning service, a food caterer, a jewelry store, or perhaps a grocery store on the corner street. Although very small, these businesses together employ a huge section of the population and may be considered as the life blood of an economy.

Payday loans to the rescue.
The micro businesses lack the resources and collateral to raise any significant capital from major banks or financial institutions. This makes it difficult for them to meet urgent capital expenditures such paying for the machinery or transportation. Even meeting working expenditure is a hard task as sometimes it might become difficult for a micro business to meet basic obligations such as payment of bills or paychecks of junior and middle level employees.


Payday loans are of tremendous benefit in such a situation.
Payday loans offer immediate cash advances so that the small and micro businesses may meet their immediate obligations. Further, payday loans are confidential. This is important as any news of a small business going for an emergency loan might be exploited by competitors, scare investors and could be a black mark against the small business. With its immediate cash payments and promise of confidentiality, payday loans significantly help small and micro businesses in what is often a delicate situation fraught with great complications.
 
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